SMSF funds with members going through a divorce should seek a court order following the division of their superannuation assets even if the split is an amicable one, an SMSF technical expert has said.
SuperConcepts SMSF technical and private wealth executive manager Graeme Colley urged SMSF administrators and advisers to ensure their clients solidify the division of their superannuation assets with a binding agreement and a court order in an effort to prevent future disputes regarding the equity of how the assets were split.
He added this is a prudent measure to have in place in all situations where a married couple is going through divorce proceedings regardless of whether the parting is harmonious or acrimonious.
“Despite the fact that some clients don’t want to go to the courts because they feel embarrassed, it’s best to get a binding financial or superannuation agreement and get a court order on it because it crystallises the way in which the assets get divided between the parties,” Colley said.
“The importance of that is, if one party’s aggrieved some time down the track that they’ve been taken for a bit of a ride, they can’t come back and make a secondary claim on the family law split that’s been made,” he continued.
“That’s really important. If they don’t have these agreements in place and they’re not approved by the court, they can come back, or there’s the potential to come back and make a claim that they didn’t get an equitable split of the particular assets.”
According to Colley it is also important for trustees to ensure the language used in the court order is unambiguous to ensure the division of assets is as seamless as possible.
Last year, Heffron managing director Meg Heffron said many advisers and accountants underestimated the impact they could have on helping clients manage the effect of a marriage breakdown on their SMSF.